Lafarge plans to increase Iraq capacity by 2Mt

Lafarge plans to increase its capacity in Iraq by 2Mta by 2013 as the country rebuilds homes and infrastructure destroyed by war, reports Bloomberg.

Lafarge currently has capacity of 6Mta across three plants and is producing 4Mt, or 25 per cent of Iraq’s cement, Marcel Cobuz, chief executive officer for Iraq, said in an interview in Amman.

“Now the demand in Iraq is constantly growing,” he said. The unit had more than 10 pe rcent growth last year and “a little bit less this year,” he said.

Demand for building materials in Iraq is set to increase as the country rebuilds infrastructure homes after years of war and economic sanctions. Iraq’s housing minister said yesterday that it will need to build 2.5 million homes by 2015.

The company’s Karbala plant produced clinker for the first time last week and “we expect the first cement to be in the market from this plant in 10 days under the Lafarge brand.”

Lafarge expects growth of at least 10 per cent next year in Iraq as it produces sulphate-resistant cement suited for the salty soils in the middle and southern parts of the country, the CEO said.

About 60 percent of Lafarge’s sales in the country are directed to the middle and southern regions, where the government’s signing of oil contracts has “had a multiplier effect,” Cobuz said. “We see a concentration of 35 percent of foreign direct investment in Basra and the southern region. Growth is coming in the south and around Baghdad and Karbala.”

In the past two months, the company sold 100,000 tons of cement to Iraq’s housing ministry as the government tries to ensure the continuity and quality of supply, he said.

Lafarge acquired two plants in northern Iraq when it bought the cement unit of Orascom Construction Industries in January 2008.
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